Yahoo Finance Danaher (DHR) to Spin-Off Environmental Unit, Shares Pop
Danaher Corporation DHR has announced that it will separate its Environmental & Applied Solutions ("EAS") segment into an independent public company. The spin-off will help the company focus on its Life Sciences (major revenue generator) and Diagnostics segments. Following this news, shares of the company popped 4.4% in after-hours trading on Sep 14.
The new EAS company will comprise the operations of Danaher’s Water Quality and Product Identification businesses. It will include the existing Environmental & Applied Solutions segment’s companies such as Hach, ChemTreat, Trojan, OTT and McCrometer in Water Quality and Videojet, X-Rite Pantone, Esko and Linx in Product Identification. The unit generated revenues of approximately $4.7 billion (around 16% of the top line) in 2021.
Rainer M. Blair, president and chief executive officer of Danaher, said, "We believe that EAS will be advantaged as a standalone company with greater opportunities to pursue high-impact organic and inorganic investments." The tax-free spin-off is expected to be completed in the fourth quarter of 2023.
Danaher Corporation Price
Danaher Corporation price | Danaher Corporation Quote
Jennifer L. Honeycutt will head EAS as its president and chief executive officer. Currently serving as the executive vice president of Danaher, Honeycutt also oversees the Environmental & Applied Solutions segment.
On a separate note, Danaher said that it will provide an update on its third-quarter 2022 performance at an investor and analyst event today. Blair is expected to communicate that the company anticipates core revenue growth above the prior guidance of low-single digits for the third quarter.
The improvement is due to expectations of higher Cepheid respiratory testing revenues of more than $500 million in the third quarter compared with the prior view of approximately $325 million. DHR continues to expect base business core revenue growth of high-single digits for the third quarter.
Zacks Rank & Key Picks
Danaher presently carries a Zacks Rank #3 (Hold).
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